Exxon Mobil Corp. continued
a year-long buying spree for U.S.
natural-gas assets, paying $575 million for wells and reserves in Arkansas.
Thursday's deal with Petrohawk Energy Corp. underscores Exxon's continuing
interest in acquiring gas in the U.S., despite low prices for the
relatively clean-burning fuel used to heat homes and generate electricity.
Exxon became the largest gas producer in the U.S. after it bought XTO Energy
Inc. in June for $25 billion. In July, Exxon paid $695 million for Denver-based
Ellora Energy Inc.
Exxon said it produced 3.726 billion cubic feet of natural gas a day in the U.S. in the
third quarter, about 16% of the nation's total consumption. The Petrohawk deal
will add another 98 million cubic feet of daily production, according to
analysts at Jefferies & Co. The Ellora deal gave Exxon additional acreage
in the prolific Haynesville shale, which straddles northern Louisiana
and eastern Texas.
Shale fields have reinvigorated U.S.
natural-gas production in recent years.
Most U.S.
gas producers are seeking to increase oil production to capitalize on high
prices for crude, especially in comparison with natural gas. While oil prices
have been climbing, closing above $90 a barrel on Wednesday, natural gas has
been trading around $4 per million British thermal units, far below the $13
fetched in 2008. Petrohawk said early this month that it was considering selling
assets to fund drilling activity in areas such as the oil-rich Eagle Ford shale
in south Texas.
But the purchase by Exxon's XTO Energy unit of Petrohawk's holdings in the Fayetteville shale in Arkansas, shows that Exxon is bullish about
the long-term prospects for natural gas. The Irving, Texas,
company says gas will be the fastest-growing fuel through 2030.
The Petrohawk deal "provides a strategic addition to XTO's existing
410,000 net acre position in the Fayetteville
shale trend," said Jeffrey Neu, an XTO spokesman. He said XTO will
continue pursuing similar opportunities aimed at increasing domestic
natural-gas output.
XTO also acquired Houston-based Petrohawk's pipeline assets in the Fayetteville
Shale for $75 million.
The deal "looks like a good addition" to Exxon's existing shale-gas
assets, according to analysts at Simmons & Co. The purchase also proves
that XTO "can execute transactions well after the megamerger" with
Exxon Mobil, Simmons said.
Exxon Mobil has said it intends to keep XTO's independence, deploying its
expertise in shale-gas drilling across Exxon's global empire. Exxon is
developing international shale-gas assets in Canada
and Europe.